System for physically delivering virtual currencies

ABSTRACT

Systems and methods are disclosed for settling futures contracts that are based on virtual currencies. A clearing counter-party operates a clearing counter-party computer that may oversee physical delivery of virtual currency between a buyer and seller. The clearing counter-party computer does not take possession of the virtual currency and monitors a publicly viewable ledger to confirm that transactions have taken place.

REFERENCE TO RELATED APPLICATIONS

This application is a continuation under 37 C.F.R. § 1.53(b) of U.S.patent application Ser. No. 16/679,610 filed Nov. 11, 2019 now U.S. Pat.No. ______, which is a continuation under 37 C.F.R. § 1.53(b) of U.S.patent application Ser. No. 14/932,374 filed Nov. 4, 2015 (AttorneyDocket No. 004672-15516Z-US)) now U.S. Pat. No. 10,504,178, the entiredisclosures of which are hereby incorporated by reference and reliedupon.

FIELD OF THE INVENTION

The present invention relates to systems for clearing derivativecontracts based on virtual currencies and, in particular to systems thatallow for the physical delivery of virtual currencies without theclearing counter-party directly possessing the virtual currencies.

DESCRIPTION OF THE RELATED ART

Common derivative contracts include futures and options contracts.Options are frequently traded via computer systems and methods. Anoption may be used to hedge risks by allowing parties to agree on aprice for a purchase or sale of another instrument that will take placeat a later time. One type of option is a call option. A call optiongives the purchaser of the option the right, but not the obligation, tobuy a particular asset either at or before a specified later time at aguaranteed price. The guaranteed price is sometimes referred to as thestrike or exercise price. Another type of option is a put option. A putoption gives the purchaser of the option the right, but not theobligation, to sell a particular asset at a later time at the strikeprice. In either instance, the seller of the call or put option can beobligated to perform the associated transactions if the purchaserchooses to exercise its option or upon the expiration of the option.

Futures contracts generally obligate buyers and sellers to purchase andsell an asset at a predetermined time and at a predetermined price.Assets may include physical commodities and financial instruments.Futures contracts can specify settlement either by physical delivery orby cash settlement. Settling a futures contract with physical deliveryinvolves delivering the asset. For example, a quantity of corn may bedelivered to a specific location. Settling a futures contract with cashsettlement would involve making a cash payment corresponding to thevalue of the asset, e.g. the fair market value of a quantity of corn, inlieu of transferring the actual asset itself.

The U.S. Department of Treasury's Financial Crimes Enforcement Network(FinCEN) distinguishes between real and virtual currencies. FinCENdefines real currency as “the coin and paper money of the United Statesor of any country that [i] is designated as legal tender and that [ii]circulates and [iii] is customarily used and accepted as a medium ofexchange in the country of issuance.” FinCEN defines virtual currency as“a medium of exchange that operates like a currency in someenvironments, but does not have all the attributes of a real currency.In particular, virtual currency does not have legal tender status in anyjurisdiction.” FinCEN further defines a convertible virtual currency asvirtual currency that “either has an equivalent value in real currency,or acts as a substitute for real currency.” More specifically,convertible virtual currency may be bought and sold for legal tender.

The term cryptocurrency refers to a subset of virtual currencies thatutilize cryptography for security purposes. Certain cryptocurrencies usea “proof of work” methodology to issue new units of currency. Othercryptocurrencies do not use a proof of work methodology, or use a proofof work methodology in combination with one or more other mechanisms toissue new units of currency. One example of a cryptocurrency is theBitcoin virtual currency. The Bitcoin virtual currency is based on acryptography technique in which transactions between parties on apeer-to-peer computer network are verified on a public ledger. Thepublic ledger is also known as a block chain and is made up of a seriesof one or more digital blocks. Each party on the peer-to-peer networkstores a copy of the block chain. When a financial transaction betweenparties takes place, it must be verified. New blocks are created astransactions are verified, and when new blocks are created, the blockchain is updated to include the new block and, accordingly, to accountfor the new transaction.

The FinCEN Guidance further distinguished between “centralized” and“de-centralized” virtual currencies. A centralized convertible virtualcurrency is one that has a “centralized repository” akin to the way inwhich central banks of a nation are the sole issuer of real currency. A“de-centralized convertible virtual currency” is defined as one that“(1) has no central repository and no single administrator, and (2) thatpersons may obtain by their own computing or manufacturing effort.”Bitcoin represents an example of a decentralized, convertible virtualcurrency.

As indicated above, some types of futures contracts are “physically”settled, i.e., the short counterparty agrees to deliver the actualcommodity at final settlement. In some cases, the short may do so byliterally providing the contract amount of the quantity to a locationspecified by the contract (e.g., delivery of crude oil to an oilterminal, delivery of grain to a grain elevator). In other cases, theshort may deliver the contracted-for commodity by providing documents(e.g., warehouse receipts representing commodities in storage) or otherevidence establishing that the contracted-for amount of the quantity hasbeen provided (e.g., data confirming transfer of a note, bond, stock orother financial instrument to a specified account). Some physicalsettlements can involve transfer of money. For example, a foreigncurrency futures contract could require transfer of a contract amount ofa foreign currency (e.g., Euros, Yen, etc.) at final settlement inreturn for payment of the contract price in a different currency (e.g.,U.S. Dollars).

For each multi-laterally traded futures contract, there is generally along counterparty and a short counterparty. Generally, however, eitherthe long or the short of each such contract is an exchange clearinghouseor clearing counter-party (CCP). For example, a first counterparty mayoffer to sell a particular type of futures contract through an exchange.After the exchange publishes that offer, a second counterparty maypurchase a futures contract of that type through the exchange at theoffered price. The exchange then establishes a first contract in whichthe first counterparty is the short and the clearing counter-party isthe long, and an offsetting second contract in which the secondcounterparty is the long and the clearing counter-party is the short,with the contract price of the first and second contracts (the acceptedoffer price of the first counterparty) being the same. The first andsecond counterparties may not know each other's identities.

The clearing counter-party provides financial safeguards in the form orfinancial guarantees or sureties that assures clearing members of theperformance of contract obligations in the event of a default or otherfailure in the clearing process. In turn, clearing members provide somelevel of financial guarantee or surety to their customers to backstoptheir obligations. Typically, a clearing house will collect margins orother funds from its clearing members to assure performance ofcontractual obligations. Additionally, a clearing house may require thatclearing members agree to post additional capital upon demand whenneeded (e.g., if there is a risk that another clearing member mightdefault on its obligations). By doing this, a clearing house mutualizesthe default or failure risk of its clearing members by aggregating fundsto apply in the event of possible defaults or failures.

A clearing counter-party could facilitate physical delivery of virtualcurrency contracts by instructing the sellers of expiring contracts totransfer the virtual currencies directly to the clearing counter-party,and the clearing counter-party would then transfer the virtualcurrencies to the buyers.

Virtual currencies, such as Bitcoin, create challenges for clearingcounter-parties. Virtual currencies can be transferred pseudonymously.And transactions in virtual currencies often lack recourse, e.g. theycannot be reversed without the consent of the recipient. As such,computer security breaches or employee dishonesty could result in lossof virtual currency assets without the ability to recover them. Holdingvirtual currency assets for settlement of derivatives contracts at aclearing counter-party presents a tempting target for thieves. Storageof virtual currency assets carries unique risks and requires specializedsecurity procedures.

There is a need in the art for improved systems and methods for clearingderivative contracts based on virtual currencies while minimizing risksto clearing counter-parties.

SUMMARY OF THE INVENTION

Embodiments of the present invention overcome problems and limitationsof the prior art by providing systems and methods that allow a clearingcounter party to confirm that virtual currency has been physicallydelivered without taking possession of the virtual currency.

In some embodiments a clearing counter-party computer is configured toprovide settlement instructions to buyer and seller computers. Theinstructions provide for the direct transfer of virtual currency betweenthe buyer and seller computers. The clearing counter-party computer maythen access a publicly viewable ledger to confirm that the sellercomputer transferred virtual currency to the buyer computer. Somealternative embodiments use a trusted depository to hold virtualcurrency.

In other embodiments, the present invention can be partially or whollyimplemented on a computer-readable medium, for example, by storingcomputer-executable instructions or modules, or by utilizingcomputer-readable data structures.

Of course, the methods and systems of the above-referenced embodimentsmay also include other additional elements, steps, computer-executableinstructions, or computer-readable data structures. In this regard,other embodiments are disclosed and claimed herein as well.

The details of these and other embodiments of the present invention areset forth in the accompanying drawings and the description below. Otherfeatures and advantages of the invention will be apparent from thedescription and drawings, and from the claims.

BRIEF DESCRIPTION OF THE DRAWINGS

The present invention may take physical form in certain parts and steps,embodiments of which will be described in detail in the followingdescription and illustrated in the accompanying drawings that form apart hereof, wherein:

FIG. 1 shows a computer network system that may be used to implementaspects of the present invention.

FIG. 2 shows a system that may be used to clear futures contracts inaccordance with an embodiment of the invention.

FIG. 3 shows a computer implemented method that may be implemented by aclearing counter-party computer or other computer device to clearfutures contracts based on virtual currencies in accordance with anembodiment of the invention.

FIG. 4 shows a system that may be used to clear futures contracts basedon virtual currencies and that involve a single buyer and multiplesellers, in accordance with an embodiment of the invention.

FIG. 5 shows a system that may be used during the settlement of futurescontracts that are based on virtual currencies, in accordance with anembodiment of the invention.

DETAILED DESCRIPTION OF THE INVENTION

Aspects of the present invention may be implemented with computerdevices and computer networks that allow users to perform calculationsand exchange information. An exemplary trading network environment forimplementing trading systems and methods is shown in FIG. 1 . Anexchange computer system 100 receives orders and transmits market datarelated to orders and trades to users. Exchange computer system 100 maybe implemented with one or more mainframe, desktop or other computers. Auser database 102 includes information identifying traders and otherusers of exchange computer system 100. Data may include user names andpasswords potentially with other information to identify users uniquelyor collectively. An account data module 104 may process accountinformation that may be used during trades. A match engine module 106 isincluded to match bid and offer prices. Match engine module 106 may beimplemented with software that executes one or more algorithms formatching bids and offers. A trade database 108 may be included to storeinformation identifying trades and descriptions of trades. Inparticular, a trade database may store information identifying the timethat a trade took place and the contract price. An order book module 110may be included to compute or otherwise determine current bid and offerprices. A market data module 112 may be included to collect market dataand prepare the data for transmission to users. A risk management module134 may be included to compute and determine a user's risk utilizationin relation to the user's defined risk thresholds. An order processingmodule 136 may be included to decompose variable defined derivativeproduct and aggregate order types for processing by order book module110 and match engine module 106.

The trading network environment shown in FIG. 1 includes computerdevices 114, 116, 118, 120 and 122. Each computer device includes acentral processor that controls the overall operation of the computerand a system bus that connects the central processor to one or moreconventional components, such as a network card or modem. Each computerdevice may also include a variety of interface units and drives forreading and writing data or files. Depending on the type of computerdevice, a user can interact with the computer with a keyboard, pointingdevice, microphone, pen device or other input device.

Computer device 114 is shown directly connected to exchange computersystem 100. Exchange computer system 100 and computer device 114 may beconnected via a T1 line, a common local area network (LAN) or othermechanism for connecting computer devices. Computer device 114 is shownconnected to a radio 132. The user of radio 132 may be a trader orexchange employee. The radio user may transmit orders or otherinformation to a user of computer device 114. The user of computerdevice 114 may then transmit the trade or other information to exchangecomputer system 100.

Computer devices 116 and 118 are coupled to a LAN 124. LAN 124 may haveone or more of the well-known LAN topologies and may use a variety ofdifferent protocols, such as Ethernet. Computers 116 and 118 maycommunicate with each other and other computers and devices connected toLAN 124. Computers and other devices may be connected to LAN 124 viatwisted pair wires, coaxial cable, fiber optics or other media.Alternatively, a wireless personal digital assistant device (PDA) 122may communicate with LAN 124 or the Internet 126 via radio waves. PDA122 may also communicate with exchange computer system 100 via aconventional wireless hub 128. As used herein, a PDA includes mobiletelephones and other wireless devices that communicate with a networkvia radio waves.

FIG. 1 also shows LAN 124 connected to the Internet 126. LAN 124 mayinclude a router to connect LAN 124 to the Internet 126. Computer device120 is shown connected directly to the Internet 126. The connection maybe via a modem, DSL line, satellite dish or any other device forconnecting a computer device to the Internet.

One or more market makers 130 may maintain a market by providing bid andoffer prices for a derivative or security to exchange computer system100. Exchange computer system 100 may also exchange information withother trade engines, such as trade engine 138. One skilled in the artwill appreciate that numerous additional computers and systems may becoupled to exchange computer system 100. Such computers and systems mayinclude clearing, regulatory and fee systems. Coupling can be direct asdescribed or any other method described herein.

The operations of computer devices and systems shown in FIG. 1 may becontrolled by computer-executable instructions stored on acomputer-readable medium. For example, computer device 116 may includecomputer-executable instructions for receiving order information from auser and transmitting that order information to exchange computer system100. In another example, computer device 118 may includecomputer-executable instructions for receiving market data from exchangecomputer system 100 and displaying that information to a user.

Of course, numerous additional servers, computers, handheld devices,personal digital assistants, telephones and other devices may also beconnected to exchange computer system 100. Moreover, one skilled in theart will appreciate that the topology shown in FIG. 1 is merely anexample and that the components shown in FIG. 1 may be connected bynumerous alternative topologies.

FIG. 2 shows a system that may be used to clear futures contracts inaccordance with an embodiment of the invention. The futures contractsmay include virtual currency futures contracts. A clearing counter-partycomputer 202 may include a processor and a computer-readable medium thatstores computer-executable instructions. Clearing counter-party computer202 also include other conventional components, such as a networkinterface card or a motherboard configured to communicate with acomputer network. Clearing counter-party computer 202 may communicatewith a collection of trade data 204. Collection of trade data 204 mayidentify buyers and sellers and terms of futures contracts. The terms ofthe futures contracts may include expiration dates and deliveryrequirements. Collection of trade data 204 may be arranged in a databaseand may be stored within clearing counter-party computer 202.

Clearing counter-party computer 202 may be connected to a buyer computer206 and a seller computer 208. Buyer computer 206 may be used by a buyerof a futures contract and seller computer 208 may be used by a seller ofa futures contract. In some embodiments counter-party computer 202 maycommunicate with buyer computer 206 and seller computer 208 via one ormore secure channels. The secure channels may be encrypted and may use aprivate network in one embodiment or a public network, such as theInternet in other embodiments.

Clearing counter-party computer 202 may be configured to clear futurescontracts based on virtual currencies without taking possession of thevirtual currencies. In some embodiments clearing counter-party computer202 may determine when a futures contract expires and requests a virtualcurrency address 210 from buyer computer 206. Address 210 may be awallet address. After receiving address 210, clearing counter-partycomputer 202 may send transfer instructions 212 to seller computer 208.Transfer instructions 212 may include address 210 and any otherinstructions for seller computer 208 to transfer virtual currency to abuyer.

In some embodiments seller computer 208 may transfer virtual currency bysending a virtual currency transfer request 214 to a ledger computer216. Seller computer 208 may communicate with ledger computer 216 via awide area network (WAN) 218, such as the Internet, or some othernetwork. Ledger computer 216 may maintain a publicly viewable ledger 220that lists virtual currency transfers. Those skilled in the art willappreciate that ledger computer 216 may be implemented with multipleinterconnected computers and that buyer computer 206 and seller computer208 may communicate with different ones of the interconnected computers.When the virtual currency is Bitcoin, the publicly viewable ledger isthe blockchain. Clearing counter-party computer 202 and buyer computer206 may be configured to analyze publicly viewable ledger 220 to confirmthat address 210 received the virtual currency identified in the futurescontract.

FIG. 3 shows a computer implemented method that may be implemented by aclearing counter-party computer or other computer device to clearfutures contracts based on virtual currencies in accordance with anembodiment of the invention. First, in step 302 it is determined when atleast one futures contract that calls for the physical delivery of avirtual currency expires. Step 302 may include analyzing trade datastored in a collection or database. Next, in step 304 it is determinedif a futures contract has expired. If no contract has expired, theprocess waits a predetermined time period in step 306 and then returnsto step 304. When a futures contract has expired, in step 308 buyers andsellers are paired off for delivery purposes. Step 308 may includematching buyers and sellers and quantities.

After buyers and sellers are paired off, in step 310 a virtual currencyaddress is received from a buyer computer. The buyer computer maycorrespond to a buyer of a virtual currency futures contract. Step 310may include a clearing counter-party computer requesting a virtualcurrency address. In some embodiments the virtual currency address is aBitcoin wallet address. Next, in step 312, transfer instructions aresent to a seller computer. The transfer instructions include details fortransferring virtual currency and may include the virtual currencyaddress. The seller computer may correspond to a seller of a virtualcurrency futures contract. In step 314 a publicly viewable ledger may beaccessed to confirm that the seller transferred virtual currency to thebuyer. Step 314 may include accessing the Bitcoin blockchain andconfirming that bitcoin was transferred to a Bitcoin wallet address,such as the address received in step 310.

The system represented in FIG. 2 and the method shown in FIG. 3 involvea single buyer being paired off with a single seller. Other embodimentsmay include a single buyer and multiple sellers or multiple buyers and asingle seller. When multiple sellers are involved, the process used by aclearing counter-party computer may be modified to ensure that therequired virtual currency is delivered. Some virtual currencies, such asBitcoin, employ pseudonymity, such that the identity of parties whotransferred virtual currency to a given address may not be transparent.

FIG. 4 shows a system that may be used to clear futures contracts basedon virtual currencies and that involve a single buyer computer 206 andmultiple seller computers 402, 404 and 406, in accordance with anembodiment of the invention. A situation in which a single buyer ispaired off with multiple sellers may exist when a buyer buys a quantityof virtual currency that matches a combined quantity of virtual currencysold by multiple sellers. In order to confirm that each sellerultimately transfers the required virtual currency, clearing partycomputer 202 receives from buyer computer 206 a unique virtual currencyaddress for use by each of the multiple seller computers 402, 404 and406. Clearing counter-party computer 202 may send transfer instructions408, 410 and 412 to seller computers 402, 404 and 406. Transferinstructions 408, 410 and 412 are unique and include a unique virtualcurrency address for use by each seller computer.

Seller computers 402, 404 and 406 may transfer virtual currency bysending virtual currency transfer requests 414, 416 and 418 to ledgercomputer 216. Clearing counter-party computer 202 and buyer computer 206may confirm that the required transfers have taken place by analyzingthe publicly viewable ledger 220. In particular, clearing counter-partycomputer 202 can determine when virtual currency has not been deliveredto one of the unique addresses and associate that unique address with aseller and seller computer.

In alternative embodiments of the invention, clearing counter-partyparty computer 202 may use other mechanisms to ensure that multipleseller computers have all delivered the required virtual currency suchthat the buyer computer 206 need only provide one virtual currencyaddress. Some virtual currencies require the use of a private key whensending virtual currency. When it appears that one or more sellercomputers has not delivered the required virtual currency to a sharedaddress provided by buyer computer 206, clearing counter-party partycomputer 202 can require each of the seller computers to confirm thatthey possess a private key used in a transactions. Clearingcounter-party party computer 202 could also require the seller computersto transfer a different minimal amount of virtual currency to a thirdparty to confirm that they possess the private key used in the originaltransaction. The clearing counter-party would then be able to determinewhich seller or sellers failed to deliver the required virtual currencyto the buyer.

In some embodiments, clearing counter-party computer 202 could alsorequire seller computers to use a transaction identifier that isviewable in the publicly viewable ledger when transferring virtualcurrency. Clearing counter-party computer 202 could then associatetransactions viewable in the publicly viewable ledger with sellercomputers and identify any missing transactions. Alternatively, if thevirtual currency allows for the use of a sender address, clearingcounter-party party computer 202 could use a unique sender address toconfirm that the publicly viewable ledger includes required transactionsfrom each sender to the buyer.

Some virtual currency transfers are irrevocable. The settlement of afutures contract may call for the delivery of real currency and virtualcurrency. For example, a first party may deliver real currency and asecond party may deliver virtual currency. In order to minimize exposureto the clearing counter-party, a clearing counter-party computer mayrequire the party receiving virtual currency to maintain the amount ofreal currency in a margin account or other account. After the clearingcounter-party computer determines that the virtual currency has beentransferred by the second party, the clearing counter-party computer maythen transfer the real currency to the second party. This embodimentreduces risk to sellers of virtual currency and clearingcounter-parties.

Some virtual currency networks may allow transactions of real currencyand virtual currency to be effected as a single atomic transaction,where both the virtual currency and the real currency, or digitalrepresentations of them, are exchanged simultaneously. Such a systemwould remove any risk of one-sided exchange. A clearing counter-partycomputer may use such a system to provide delivery instructions tobuyers and sellers. For example, at settlement, a clearing counter-partycomputer may obtain virtual currency addresses from buyers and sellersand instruct a buyer to purchase virtual currency from a seller address.The clearing counter-party computer may also instruct the seller toexpect the transaction as part of the settlement process. The clearingcounter-party computer may confirm that the transaction took place byanalyzing the publicly viewable ledger.

Some embodiments of the invention may use a trusted depository or vaultto hold virtual currency. The use of a trusted depository or vaultallows a clearing counter-party to participate in the settlement processwithout taking possession of virtual currency. This mechanism isefficient in part because it does not require a clearing counter-partyto maintain required storage security procedures. A trusted depositoryor vault may specialize in secure storage of virtual currency and canimplement specialized security procedures, and can continuously improveprocedures to address new threats.

FIG. 5 shows a system that may be used during the settlement of futurescontracts that are based on virtual currencies, in accordance with anembodiment of the invention. A clearing counter-party computer 502communicates with a buyer computer 504 and a seller computer 506.Clearing counter-party computer 502, buyer computer 504 and sellercomputer 506 may all be configured to communicate with a virtualcurrency depository 508. One or more of the communication channels maybe secure and/or encrypted. Virtual currency depository 508 may includeone or more memories, such as currency memory 510 for storing virtualcurrency. Virtual currency depository 508 may also include an ID memory512 that associates unique identification codes with virtual currencyaddresses. Clearing counter-party computer 502 may include an ID memory514 that associates the unique identification codes with clearing memberfirms. The use of a unique identification code allows clearingcounter-party computer 502 to communicate with virtual currencydepository 508 without knowing any of the virtual currency addresses.This configuration reduces security risks and allows clearingcounter-party computer 502 to ensure delivery without monitoring theblockchain.

Clearing counter-party computer 502 may use the unique identificationcodes to query the virtual currency depository 508 to ensure the buyerand seller firm accounts exist (i.e. the depository has wallets for boththe buyer and the seller). Clearing counter-party computer 502 may alsoquery the depository for a firm's balance to ensure sufficient virtualcurrency is on deposit prior to assignment. In some embodiments,clearing counter-party computer can inform virtual currency depository508 that a certain amount of virtual currency from the selling firmshould be held on reserve as the seller will be required to deliver itshortly.

During settlement, clearing counter-party computer 502 can pair offbuyers and sellers for delivery purposes. Clearing counter-partycomputer 502 may then instruct virtual currency depository 508 totransfer virtual currency from the seller's ID to the buyer's ID, andvirtual currency depository 508 can provide a confirmation to clearingcounter-party computer 502 when the transfer has been completed.Finally, clearing counter-party computer 502 may adjust thebuyer's/seller's positions to designate the transfer as complete.

When multiple contracts are involved, clearing counter-party computer502 may net the total obligations of the clearing participants, whichincludes buyers, sellers, and clearing participants who have both boughtand sold, and instruct virtual currency depository 508 to move the netamount of virtual currency between each clearing participant. In analternative embodiment, clearing counter-party computer 502 would notnet the total obligations and would instruct virtual currency depository508 to make every transaction so that there is a record of all of thetransactions.

Virtual currency depository 508 may hold virtual currency in anon-segregated manner or in a segregated manner. When virtual currencyis held in a non-segregated manner, virtual currency transfers to thedepository may be made to a virtual currency address of the depository.When virtual currency is held in a segregated manner, virtual currencytransfers may be sent to and from individual virtual currency addressesthat correspond to the unique identification codes. Alternatively,virtual currency addresses may belong to individual buyers or sellers,or a clearing counter-party may have multiple virtual currencyaddresses.

In some embodiments, to eliminate or reduce the risk of loss or theft,the rules of engagement between a clearing counter-party, a virtualcurrency depository, and the clearing participants, such as buyers andsellers, can specify that the depository is only allowed to transfervirtual currency between designated participants within an ecosystemapproved by the depository and the clearing counter-party, i.e. onlyclearing participants of the clearing counter-party with wallets at thedepository. The virtual currency depository would decline to honor anyrequests to transfer virtual currency to any party outside of thisclosed ecosystem, except that it would permit each participant towithdraw virtual currency to wallets that the depository has verifiedare controlled by the participant making the withdrawal. This creates anextra layer of protection that ensures the virtual currency depositorywould not inadvertently transfer virtual currency to an externaladdress.

The systems described above allows for the efficient clearing of virtualcurrency futures contracts. Clearing counter-party computers never takespossession of virtual currencies, so risks are not concentrated. Thesystems described above also allow clearing counter-party computers toconfirm that virtual currency transfers have taken place.

The present invention has been described herein with reference tospecific exemplary embodiments thereof. It will be apparent to thoseskilled in the art, that a person understanding this invention mayconceive of changes or other embodiments or variations, which utilizethe principles of this invention without departing from the broaderspirit and scope of the invention as set forth in the appended claims.All are considered within the sphere, spirit, and scope of theinvention.

1. A system comprising: a clearing counter-party computer incommunication with a buyer computer corresponding to a buyer obligatedper a first virtual currency futures contract to take physical delivery,upon an associated expiration date, of a first quantity of a virtualcurrency and a seller computer corresponding to a seller obligated per asecond virtual currency futures contract to make physical delivery, uponan associated expiration date, of a second quantity of the virtualcurrency, the virtual currency being transacted via a publicly viewableelectronic ledger also in communication with the clearing counter-partycomputer, and wherein the clearing counter-party computer comprises acomputer-readable medium that contains computer-executable instructionsthat cause the clearing counter-party computer, without the clearingcounter-party taking actual possession of the virtual currency, to:determine that both the first and second futures contracts have expired;receive, based on the determined expiration, a virtual currency addressfrom the buyer computer; direct the seller computer to transfer, via thepublicly viewable electronic ledger, an amount of the virtual currencyto the received virtual currency address, and further direct the sellercomputer to include in the transfer a unique identifier having anassociation known by the clearing counter-party computer with thedirected transfer and which, when included with the transfer, will beviewable in the publicly viewable electronic ledger in associationtherewith; and confirm, via the publicly viewable electronic ledger,that the seller transferred the amount of the virtual currency via adetermination that the publicly viewable electronic ledger includes theunique identification code.
 2. The system of claim 1, wherein the firstand second virtual currency futures contracts are the same virtualcurrency futures contract.
 3. The system of claim 1, wherein theclearing counter-party computer does not identify the buyer and sellerto each other.
 4. The system of claim 1, wherein the uniqueidentification code comprises the amount of the virtual currency to bephysically delivered to the buyer.
 5. The system of claim 1, furtherincluding a secure channel for receiving the virtual currency addressfrom the buyer computer and/or directing the seller computer.
 6. Thesystem of claim 1, wherein the virtual currency address comprises atleast one wallet address.
 7. The system of claim 1, wherein the publiclyviewable electronic ledger is maintained by one or more ledger computersin communication with the clearing counter-party computer.
 8. The systemof claim 1, wherein the virtual currency comprises Bitcoin.
 9. Thesystem of claim 1 wherein the computer-executable instructions furthercause the clearing counter-party computer to reduce the quantity of thevirtual currency to be physically delivered to the buyer by an amountthe buyer is obligated to deliver to another buyer per another futurescontract determined to be expired and per which the buyer is a seller.10. A clearing counter-party computer in communication with buyer andseller computers and a publicly viewable electronic ledger via which avirtual currency is transacted, the clearing counter-party computercomprising a processor and a memory coupled therewith, the memorystoring computer-executable instructions that when executed by theprocessor, cause the processor, without the clearing counter-partytaking actual possession of any virtual currency, to: determine thatboth first and second futures contracts have expired, the first futurescontract comprising an obligation of a buyer, associated with the buyercomputer, to take physical delivery, upon expiration date, of a firstquantity of a virtual currency, the second futures contract comprisingan obligation of a seller, associated with the seller computer, to makephysical delivery, upon expiration, of a second quantity of the virtualcurrency; receive, based on the determined expiration, from the buyercomputer, a designation identifying where the seller computer is totransfer an amount of the virtual currency, and communicate the receiveddesignation thereto along with a unique identifier having an associationwith the transfer known by the clearing counter-party computer andwhich, when included as part of the transfer, will be viewable in thepublicly viewable electronic ledger in association therewith; andconfirm, via the publicly viewable electronic ledger, that the sellertransferred the amount of the virtual currency via a determination thatthe publicly viewable electronic ledger includes the uniqueidentification code.
 11. The system of claim 10, wherein the first andsecond futures contracts are the same futures contract.
 12. The systemof claim 10, wherein the clearing counter-party computer does notidentify the buyer and seller to each other.
 13. The system of claim 10,wherein the unique identifier comprises the amount of the virtualcurrency to be physically delivered to the buyer.
 14. The system ofclaim 1, further including a secure channel for receiving the virtualcurrency address from the buyer computer and/or directing the sellercomputer.
 15. The system of claim 1, wherein the virtual currencyaddress comprises at least one wallet address.
 16. The system of claim1, wherein the publicly viewable electronic ledger is maintained by oneor more ledger computers in communication with the clearingcounter-party computer.
 17. The system of claim 1, wherein the virtualcurrency comprises Bitcoin.
 18. The system of claim 1 wherein thecomputer-executable instructions further cause the clearingcounter-party computer to reduce the quantity of the virtual currency tobe physically delivered to the buyer by an amount the buyer is obligatedto deliver to another buyer per another futures contract determined tobe expired and per which the buyer is a seller.
 19. A computerimplemented method comprising: determining, by a clearing counter-partycomputer in communication with buyer and seller computers and a publiclyviewable electronic ledger via which a virtual currency is transacted,that both first and second futures contracts have expired, the firstfutures contract comprising an obligation of a buyer, associated withthe buyer computer, to take physical delivery, upon expiration date, ofa first quantity of a virtual currency, the second futures contractcomprising an obligation of a seller, associated with the sellercomputer, to make physical delivery, upon expiration, of a secondquantity of the virtual currency; receiving, by the clearingcounter-party computer based on the determined expiration, from thebuyer computer, a designation identifying where the seller computer isto transfer an amount of the virtual currency, and communicating thereceived designation thereto along with a unique identifier having anassociation with the transfer known by the clearing counter-partycomputer and which, when included as part of the transfer, will beviewable in the publicly viewable electronic ledger in associationtherewith; and confirming, by the clearing counter-party computer viathe publicly viewable electronic ledger, that the seller transferred theamount of the virtual currency via a determination that the publiclyviewable electronic ledger includes the unique identification code. 20.The computer implemented method of claim 19, wherein the first andsecond futures contracts are the same futures contract.
 21. The computerimplemented method of claim 19, wherein the clearing counter-partycomputer does not identify the buyer and seller to each other.
 22. Thecomputer implemented method of claim 19, wherein the uniqueidentification code comprises the amount of the virtual currency to bephysically delivered to the buyer.